A quantity less than the equilibrium quantity in a competitive market is inefficient because
A) the marginal benefit of another unit is greater than its marginal cost.
B) too much of the good is being produced.
C) the marginal cost of another unit is greater than its marginal benefit.
D) the marginal benefit of another unit is not equal to zero.
E) the marginal benefit is not maximized.
A
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Explain the separate effects of each event on U.S. real GDP and the price level, starting from a position of long-run equilibrium
What will be an ideal response?
Dominic sells pizza slices for $5 on the Santa Monica Pier. He currently sells 500 slices of pizza per day.This is a perfectly competitive business, and Dominic faces a perfectly price elastic demand curve. If he wants to try to increase daily revenues to $3,000, he should
A. raise the price of his pizza to $6 per slice and continue to sell 500 slices per day. B. lower the price of his pizza to $4 per slice and try to sell 750 slices per day. C. do nothing since he can do nothing to increase revenue. D. keep the price at $5 per slice and produce 600 slices per day.